Canada must ‘adjust its sails’ to be a world-leader in innovation | The Star
For as long as we can remember, Canada has been the persistent runner-up — a nation that has yet to own the podium in becoming a world-leader in innovation. We have a choice. As leadership guru John C. Maxwell puts it: “The pessimist complains about the wind. The optimist expects it to change. The leader adjusts the sails.”
The federal government’s Industry Strategy Council recently published its “Restart, Recover, and Reimagine” report. This report sets out a post-pandemic economic strategy for Canada based on four key pillars. For us, the one that stood out was the need for our country to accelerate its efforts to become a digital and data-driven economy.
Because digital is essential to the growth and strength of the other three pillars, becoming a digital and data-driven economy underpins the entire strategy for our future prosperity — and that’s where Canada needs to adjust its sails.
The report details how Canadian business leaders and policy-makers can support the development of innovative products, boost exports and accelerate the growth of Canada’s emerging startups and scaling firms.
We’ve already seen early evidence of our capacity to lead. Shopify, Canada’s standout tech company, now has the largest market cap on the TSX. Companies like e-learning software company Docebo and Lightspeed POS are forging formidable market positions by capitalizing on the digital transformation trends.
In all of these situations, it is the intersection of digital innovation, new consumer behaviours and changing business models has catapulted their success in Canada and abroad.
Indeed, according to a 2018 report by the Washington-based Brookings Institution and the Martin Prosperity Institute at the University of Toronto, Canadian tech companies are uniquely positioned to support the country’s post-pandemic economic recovery. This is because they tend to do significantly more research and development than those in other sectors, employ a greater share of Canadian science, technology, engineering and mathematics (STEM) workers, and are more likely to export their products and services.
The tech sector has also been well-placed to leverage the trends the pandemic has turbocharged — from adoption of digital payments technologies to the rise of medtech — to fuel their growth. All of this helps make Canada more globally competitive.
Perhaps of greatest relevance to Canada’s broader economic recovery, the tech sector can and must play a major in enabling the digital transformation of traditional sectors, such as mining, retail, transportation and agriculture.
Compared to other OECD countries, Canadian firms have historically underinvested in technology adoption, which is why productivity from key sectors, such as manufacturing, is lagging behind U.S. firms in the same sector. As former Bank of Canada Gov. David Dodge points out, Canadian industry’s persistent underinvestment has ramifications on our competitiveness.
Between 2010 and 2019, real business investment in software increased four times faster in the U.S. than Canada. Likewise, Canadian producers have been slow to seize the opportunities provided by the applications of such technologies as artificial intelligence and big data. Whether as solution providers or strategic partners, Canada’s tech firms can power the digital journey of our traditional engines of economic growth.
As the federal government develops its fiscal blueprint for the coming year and beyond, it is imperative that digital innovation be at core of its economic recovery program, including measures to help Canadian businesses better exploit intellectual property, additional investments in skills development and tax incentives to further technology adoption.
Governments around the world are developing policies and infrastructure to capitalize on digital investments and advance new technologies in support of productivity and innovation. It’s the table stakes for competing in the post-pandemic global economy. Simply put, Canada cannot afford to fall further behind.